A man stands on the rubble of his home in a shanty town in Abaco after the passage of Hurricane Dorian. Photo: Ramon Espinosa/AP
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas faced "serious challenges" with aging infrastructure prior to Hurricane Dorian, the Inter-American Development Bank (IDB) said yesterday, with public investment "insufficient".
The multi-lateral lender, unveiling its Caribbean Regional Quarterly Bulletin for the 2019 third quarter, said the category five storm had deepened problems associated with decaying infrastructure assets that require urgent modernisation to underpin The Bahamas' economic competitiveness.
Calling for an urgent "transformation" in a document written prior to Dorian, the IDB revealed that the Bahamian government has traditionally invested the least - measured as a percentage of gross domestic product (GDP) - in public infrastructure when compared to other Caribbean nations in the two decades since 1997.
While such investment typically increases in the aftermath of major hurricanes, and will likely reach exceptional levels following the devastation inflicted upon Grand Bahama and Abaco by Hurricane Dorian, the IDB said this nation's infrastructure will continue to be highly susceptible to "disastrous climactic shocks".
"With regard to infrastructure, serious challenges lie in aging maritime, airport and energy systems, which require a transformation to deliver adequate services," the IDB said of The Bahamas' pre-Dorian condition.
"Public investment is not enough given the country's infrastructure needs, even though investment in infrastructure in The Bahamas is high by international comparison... important infrastructure gaps persist. Expenditure levels of public capital outlays average roughly 2.3 percent of GDP except for periods of hurricane reconstruction. In fiscal year 2018-2019, the compression of capital spending helped reduce the deficit."
That latter strategy is now essentially out the window. Dorian struck at a time when the government has been restraining capital spending on infrastructure projects to help it rein in the fiscal deficit and meet the targets set out in the Fiscal Responsibility Act.
The devastating storm has exacerbated an existing infrastructure deficit that was previously branded "unquantifiable" when Desmond Bannister, minister of works, spoke to Tribune Business in June 2019.
He revealed then that the Ministry of Works' $93.736m capital works budget for 2019-2020 was $100m less than desired, with the former sum some $27m below the prior year's allocation.
And, with $53.512m of the $93.736m earmarked for projects already underway, there was then less than $40m available to tackle further physical infrastructure needs that are replicated across virtually every island in The Bahamas.
Now, according to estimates given by Dr Duane Sands, minister of health, and Mr Bannister, the government is looking at almost $200m alone to repair the healthcare, electricity and water and sewerage infrastructure that has been laid waste by Hurricane Dorian.
"Adequate provision of water and sanitation systems constitutes an ongoing challenge for The Bahamas," the IDB said pre-Dorian. "The country's Water and Sewerage Corporation (WSC) supplies less than 50 percent of overall potable water demand in The Bahamas, as a significant portion of households and businesses rely on private water and sanitation systems.
"Currently only 14 percent of the population has access to improved sewerage and sanitation facilities, with negative impacts on the environment and health." It did, though, credit the Water and Sewerage Corporation for reducing system losses in New Providence by 60 percent and for its efforts to introduce smart metering technology.
"Despite recent advances in information and communications technology (ICT), challenges in telecommunications remain that affect e-commerce," the IDB added. "The Bahamas ranks 22nd in Latin America and the Caribbean (LAC) in mobile telephone penetration, and 15th in wireless broadband penetration (with mobile penetration rates measured at roughly 85 percent), which indicates substantial room for improvement in the development of technological solutions, especially regarding further improvements in financial inclusion."
As for energy, the IDB said electrification and power outage indicators were "below expected performance levels" although it acknowledged that the Government was moving to refinance Bahamas Power & Light (BPL) with a $450m-$550m rate reduction bond (RRB) offering and seeking to increase renewable energy penetration.
"Ports and shipping facilities are fragmented, outdated, and inefficient, requiring modernisation to maintain connectivity and aid further development," it added. "With over 53 licensed airports, 28 of which are government-owned and operated, air connectivity is comprehensive and getting better, as The Bahamas caters to all the leading air carriers of North America and some from Europe.
"However, as is the case for maritime transportation, the Family Islands require substantial investment in aviation transport and connectivity, with recent estimates suggesting that almost $140m is needed to upgrade its obsolete and inadequate public airport infrastructure and systems to comply with international aviation standards."
The IDB called for The Bahamas to establish a disaster relief fund, along with preparedness and risk reduction policies, to ensure its major infrastructure assets - such as roads, utilities, docks, bridges and ports - became more resilient to hurricanes and other climate-related challenges.
"Disastrous climatic shocks, even more dangerous because of The Bahamas' geography, fragile ecosystems and a concentrated population make the nation's infrastructure highly vulnerable to climate change and risk," the IDB added.
"Strengthening preparedness and risk reduction policies, including establishing a natural disaster savings fund, would enhance fiscal and economic resilience. Additionally, insuring public assets, encouraging greater usage of private insurance, investing in resilient infrastructure, and maintaining modern building codes, land use planning and zoning guidelines were all essential elements outlined in recent reports."
Comments
Well_mudda_take_sic 5 years, 1 month ago
Our national debt plus unfunded entitlements and other obligations guaranteed by the government already well exceeds $12 billion dollars, an ever increasing portion of which is denominated in foreign currencies. And most of our national debt arises from IDB encouraged and induced borrowings spanning decades notwithstanding that the IDB from time to time readily acknowledging that corruption is rife at all levels of our government and civil work force.
The IDB is well aware that a great portion of the borrowings they encouraged and induced has literally being squandered over the years by our corrupt government officials with the result being that we have very little of value today to show for the mountain of debt we owe. Yet here they are once again, encouraging and inducing our country to go on a borrowing spree like no other, with the devastating aftermath of Dorian as the ideal excuse for doing so.
PM Minnis and DPM Turnquest both know that even before Dorian, our national budgets were 'crowded out' by a very high level of debt service costs, leaving too little for everything else. It was recognized by the Fiscal Responsibility Act that our national debt must be painfully reduced as quickly as possible in order to avoid much much greater pain down the road, and even the possibility of the Bahamas becoming a failed state. But the IDB is now telling them to turn a blind eye to all of that as if we could somehow miraculously get back on the road to fiscal responsibility at a later date. Well that certainly won't ever happen if we foolishly take the IDB's bait.
Dorian has exposed for the IDB to clearly see, the full extent to which the illegal Haitian alien problem has for decades been a serious drag on our country's very limited economic and social welfare resources. Even before Dorian, our country's development has been stymied as evidenced by our collapsing infrastructure. Why doesn't the IDB offer Haiti financial help with the repatriation?
As I see it, the five greatest threats to the Bahamas today, in order of importance, are:
1) Undesirable foreign investors and international agencies (like the IDB) that encourage and induce government corruption.
2) The invasion of our country by many thousands of illegal Haitian aliens.
3) The 'illegal' criminal enterprises run by the racketeering numbers bosses that are literally sucking the life's blood out of our economy and in the process destroying many lives by promoting highly addictive gambling habits.
4) Our sub-standard law enforcement and criminal justice systems, along with a judiciary now fraught with political interference to the point where it has become bereft of the quality of independent minded jurists one should expect.
5) Red China's increasing efforts through propaganda and financial means to use our elected government officials to advance its own interests to the detriment of the interests of the Bahamian people.
What's your top five?
Chucky 5 years, 1 month ago
My top 5: 1) our nation of people with an attitude of entitlement which is not backed up by a history of hard work. 2) our nation of people who are undereducated, narrow minded and in denial about both. 3) our nation of people of which the majority are lazy 4) our nation of people who for the majority would rather scam for money than earn it 5) our nation of people of which a large part are criminals, who commit fraud, embezzlement and rob the government coffers at the elitist levels, rip off the population at the capitalist levels, and commit theft, robbery, murder at the low levels.
We have land, water, good weather, and most of all, we have opportunity; yet we are going nowhere fast. It’s easy to blame someone, or something else. But if only 1000 people each year made something of themselves in an upstanding way, is 25 years that’s 25000 upstanding citizens, employers , parents, neighbors etc etc. Nobody could prevent 1000 people a year from doing that. In fact nobody could prevent 10000 people a year from doing that. And yet, obviously this doesn’t happen. Who’s fault is that? Look in the mirror people!!!!
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